Peter Schiff Warns the "Real Big Drop" in Bitcoin Hasn't Happened Yet After US Midterms

Gold advocate and prominent Bitcoin critic Peter Schiff has outlined a pessimistic outlook for Bitcoin ($BTC) in the wake of the US midterm elections. Schiff argued that markets have not yet fully priced in the potential impact of recent political developments on the cryptocurrency sector, warning that a much larger decline in Bitcoin remains possible.

Speaking on The Peter Schiff Show, the economist said that despite Bitcoin losing approximately 3% of its value over the past week, the real sell-off has yet to begin. In his assessment, Bitcoin continues to move in tandem with technology stocks rather than gold, the asset traditionally regarded as a safe haven.

Schiff noted that Bitcoin was trading at approximately $75,900 at the time of his remarks, a level he pointed out sits very close to Strategy's average Bitcoin purchase cost of $75,500-$75,600.

"The Real Big Drop in Bitcoin Hasn't Happened Yet"

Schiff drew a comparison between Bitcoin's rise following the 2024 US presidential election and the current political climate. He recalled that after Donald Trump's election victory, Bitcoin initially showed only a limited rise before staging a strong rally that carried the asset to $126,000.

The economist argued that a similar process could now unfold in the opposite direction. He stated that he believes the Bitcoin price is about to collapse, adding that the current decline may be only the beginning. According to Schiff, investors have not yet fully grasped the implications of the Republicans' midterm losses for Bitcoin.

Midterm elections fall halfway through a presidential term and determine the composition of Congress, meaning they shape the legislative and regulatory environment in which crypto policy — from market oversight to reserve management — would have to advance.

At the heart of his assessment lies the possibility that the political support he believes the Trump administration provided to Bitcoin may disappear.

"The 2028 Elections Could Pose a Major Risk for Bitcoin"

Schiff predicted that the Democrats would win the 2028 presidential election and secure a strong majority in Congress. He argued that such a scenario would create a far more unfavorable regulatory environment for Bitcoin and the cryptocurrency sector in general.

According to Schiff, Trump's policies were supportive of the cryptocurrency sector and increased investor interest in Bitcoin, meaning the end of this political support could carry significant consequences for the market. He suggested that if the Democrats win the White House in 2028, the US might abandon its plans to expand its strategic Bitcoin reserve. The reserve was established during the Trump administration, which is why its future direction is closely tied to which party controls the White House and Congress.

Schiff went further, claiming that a potential Democratic administration taking office in 2029 could sell the Bitcoins held in the US strategic reserve regardless of market price. In his view, the positive political atmosphere built around the crypto sector during Trump's presidency was one of the key factors supporting Bitcoin's price rise, and with that support gone, investors' expectations for Bitcoin could change significantly.

Schiff Targets Strategy's Bitcoin Investments

The economist also criticized Strategy's Bitcoin accumulation strategy, which is led by Michael Saylor. He noted that the company has been buying Bitcoin for more than six years, and that at the time of his remarks the $BTC price was only slightly above Strategy's average cost of purchase. As one of the largest corporate holders of Bitcoin, the company's cost basis is frequently cited as a reference point for where long-term corporate buyers' positions sit.

Schiff argued that the company could have achieved a much higher return if it had invested in gold or the S&P 500 index instead of Bitcoin over the same period. He added that Strategy's Bitcoin investments have fallen considerably short of Saylor's earlier expectation of a 30% annual increase in value.

Schiff Favors Gold and Silver Over Bitcoin

Schiff observed that while Bitcoin fell approximately 3% on a weekly basis, gold rose by about 2.75% and silver by 2%. He interpreted Bitcoin's synchronization with the Nasdaq as reinforcing his argument that the digital asset does not behave as a safe haven.

He predicted that US budget deficits would grow, inflation would accelerate, and the dollar would depreciate, arguing that these economic conditions would increase demand for gold and silver.

Speaking directly to Bitcoin investors, Schiff urged them to sell their $BTC and switch to physical gold and silver. He reiterated his view that the cryptocurrency market survives thanks to political support, arguing that current price levels may not be sustainable as the Trump administration's influence on Bitcoin diminishes.

In the period ahead, points worth watching include how the midterm outcome shapes the legislative agenda affecting digital assets, whether Bitcoin's correlation with the Nasdaq persists, and whether Strategy continues adding to its holdings near its reported cost basis.

*This is not investment advice.